Strategic Materials Inc., a major North American glass recycler based in Houston, Texas, filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of Texas. Strategic Materials claimed around $432 million in debt liabilities. According to court filings, SMI’s $432 million in funded debt consists of $406 million in outstanding principal and letters of credit and $26 million in accrued and unpaid interest.
In court documents, the company states that several events led to the bankruptcy filing, including macroeconomic headwinds, increased interest rates and inflation, and rising competition in its most profitable regions. The company has also been impacted by the changing landscape in the glass recycling market, such as stricter requirements for cullet specifications.
According to court filings, the company has secured new money commitments of $23 million, subject to court approval, for a debtor-in-possession financing facility from existing lenders to support its business operations. The funding will also help SMI financially restructure and reorganize, including deleveraging the balance sheet by more than $300 million. The restructuring, to be completed with 40 days, will enable it to grow and operate sustainably while maximizing stakeholder value.
Corporate response
“The past several years presented significant operational and financial challenges, requiring a comprehensive restructuring of the company’s balance sheet,” says CEO Chris Dods. “We are grateful for the demonstration of confidence in our underlying business, represented by substantial new financing committed from the lender group.”
About Strategic Materials
Strategic Materials has more than 40 locations in the U.S. and recycles more than two million tons of glass annually, serving end markets that include the flat glass and specialty glass industries, among others. It employs more than 700 full-time and part-time workers and uses around 200 temporary workers.
